Older Student Loan Borrowers Are Parents and Caretakers

Millions of Americans over 60 have student loan debt, a burden that comes with personal and financial strain. At this stage of life, repaying college debt from one’s own education is not easy. Many older borrowers have faced setbacks—such as attending low-quality schools, experiencing market disruptions, or enduring medical hardships—that leave them financially vulnerable. Their precarious financial situation makes it difficult to save for retirement, and student loan bills only compound the difficulty. For some, the trade-offs are not just between paying loans and saving for retirement—they must also decide between paying their loan bills and covering essentials today. If they do fall behind on their loans, the government can garnish their wages, seize their entire tax refund, and even withhold some of their Social Security checks.

This new analysis by New America suggests that the burden of late-life debt is not confined to individual borrowers—it likely has intergenerational effects, impacting the financial security of families across generations. Recent data from two nationally representative surveys, the Panel Study of Income Dynamics (PSID) and the Survey of Household Economics and Decisionmaking (SHED), show that many older borrowers are also parents and caregivers who support aging parents, adult children, and even neighbors. When older borrowers’ finances are stretched thin by student loan payments, the strain extends to families, communities, and the next generation. A few policy changes could ensure that, as we grow older, we can all focus on our families and communities—not on decades-old student debt.

Older Americans still repaying student loan debt are just as likely as their peers to have children (see Figure 1). According to 2021 PSID data, 85 percent of households with student loan debt where all adults are 60 or older include at least one parent. On average, the parents in these households have more than two children.

Given the ages of these borrowers, most of their children are likely adults. Nevertheless, their children have likely faced—and will continue to face—negative effects from their parents' debt. Student loan debt likely leaves parents with fewer resources to pass on to their children, whether in the form of help with current day expenses or an inheritance. In addition, the educational decisions of these children may have been influenced by their parents’ loans. In 2022 focus groups with defaulted borrowers, the New America team found that people who had negative experiences with student loans often advise younger relatives to think twice about a college investment. This advice could have unintended negative consequences for the children’s earnings since college remains a sound financial investment for most students.

While most older borrowers have raised children, a significant minority are still in active caretaker roles. Compared to their peers, borrowers 60 and older who owe student loan debt from their own education are more likely to be caring for someone in their household.

Older borrowers' living arrangements, as calculated from 2022 and 2023 SHED data, provide insight into their care obligations. Around 9 percent of borrowers 60 and older live with a child under 18, compared to just 2 percent of their peers (see Figure 2). When these borrowers face financial stress from their loans, it limits the attention and resources they can devote to raising a child during the critical early years of development. Older borrowers are also more likely to live with adult children (26 percent versus 19 percent) and elderly parents (7 percent versus 2 percent) compared to other older Americans. Overall, more than one in three older Americans who still owe debt from college live with a child or parent.

The financial lives of household members are often intertwined, even when no one is in a caretaker role. However, according to SHED data from 2022, many older borrowers are providing intensive support to their adult children or aging parents. About 70 percent of those living with adult children or parents report living together partially to provide childcare, medical care, or financial assistance. In total, nearly 20 percent of older borrowers are either caring for a child under 18 or providing financial, medical, or caretaking support to adult children or parents in their household.

The caretaking role of older borrowers also extends beyond the household. According to the 2023 SHED, 28 percent of older borrowers regularly provide unpaid help or care for an adult relative or friend, which could include household members or those outside the household. This is over 10 percentage points higher than older Americans without outstanding student loan debt for their own education and higher compared to student loan borrowers overall (See Figure 3). In 2021, the same percentage (28 percent) of older borrowers reported that they regularly provide financial support to someone outside of the household. Given that many older borrowers support people outside their home, the negative impact of student loan debt likely extends beyond the individual borrower—it spreads to the broader community.

Older borrowers’ caretaking, in turn, affects their financial lives. For some, caretaking responsibilities may spur more work, even into retirement years. Older borrowers who still owe student loans from college are more likely than others 60 and above to still be working; 44 percent worked in the month prior to the 2022 SHED survey, compared to 29 percent of their peers without student loan debt. It may be that older borrowers feel they cannot retire because they do not have enough saved up, especially with relatives and others to support.

On the other hand, caretaking responsibilities prevent some older borrowers from working, limiting their ability to earn income that could help repay their loans. Among those who did not work in the month prior to the survey, older borrowers were more likely to cite childcare or family obligations as the reason (24 percent, compared to 7 percent of other non-working older adults), and less likely to cite retirement as the reason. Overall, 13 percent of older borrowers reported not working partially because of childcare and family obligations.

The burden of student debt for those nearing retirement is often viewed as an individual problem, but its effects extend far beyond the borrowers themselves. Older borrowers are not just individuals managing their own finances—they are parents, caregivers, and sources of support for their communities. When educational and student loan systems fail these borrowers, the consequences also affect the children, relatives, and friends who depend on them.

Fortunately, several reforms can help ensure older Americans—and the people who rely on them—are on more solid financial footing. The federal government can strengthen oversight of low-quality schools so that fewer borrowers are saddled with debt for programs that fail to deliver meaningful returns. It can safeguard and streamline processes for loan forgiveness in cases where a borrower’s alma mater closes or borrowers become permanently disabled. The government should also help more borrowers enroll in affordable, income-driven repayment plans so they can stay out of default, while limiting harsh penalties like wage, tax refund, and Social Security garnishments for those in default. All of this will help ensure older borrowers can focus on their families and communities, rather than on coping with their long-held college debts.